Three launches Superdrug Mobile MVNO

Mobile operator Three has launched a Mobile Virtual Network Operator (MVNO) with the health and beauty chain Superdrug in an effort to boost Three’s presence in the challenging market.

Superdrug Mobile will be offering a SIM-only deal, costing £10 per month from 20 June and will be available across Superdrug’s 807 UK stores. The retailer has been selling Three mobiles since 2003.

Three has been looking for ways to exploit the market for MVNOs, particularly following the launch in 2015 of iD Mobile, owned by Dixons Carphone.

You may not be aware but Three has owned Superdrug since 2002. Back then the retailer was sold to the continental drugstore operator Kruidvat in 2001, which in turn sold it to the conglomerate CK Hutchinson the following year. CK Hutchinson is currently the owner of Three.

Three believes that the extensive retail presence of Superdrug will boost customer numbers and revenues. And the announcement proved timely following the publication of Three’s full-year results where it reported a fall in earnings of 2%. Three blamed the fall on IT and network upgrades.

In a highly commoditised mobile market, the power of branding and distribution can make a difference for some customers. With the success of iD Mobile, Three has clearly learned that wholesale can be key in completing the retail business. Wholesale remains a good and profitable business and Three can grow with such a strategy quite nicely.

- Dario Talmesio: Analyst, Informa

The challenge for the MVNO market took a qualitive leap last year when the Chinese giant China Mobile entered the UK with its own MVNO operator. The new player piggybacks on the EE network and primarily will target the UK’s 433,000 strong Chinese community, alongside the 82,000 Chinese students currently studying in the UK.

With China Mobile moving into the UK all three Chinese mobile network operators are now active in the country’s MVNO space. China Telecom launched CTExcelbiz on the EE network back in 2012, while China Unicom launched CUniq on the O2 network in 2016.

Last year Three acquired UK Broadband for £250 million to improve its fixed wireless offering and gain a greater share of spectrum.

Keeping it all in the family, Three’s CK Hutchinson is owned by Hong Kong billionaire Li Ka-shing and his eldest son Victor, while loss-making UK Broadband is run by Li Ka-shing’s younger son Richard.

image source: Mtaylor848